- Share of long open trades has the smallest possible advantage at 51%
- Bulls are targeting 1,155 (100-day SMA) after crossing 2014 low
- Bearish interim goals are Aug 26/27 lows at 1,117
- Economic events to watch in the next 24 hours: Euro zone Services PMI (Aug) and Retail Sales (Jul); ECB Interest Rate Decision and Press Conference; US Services PMI (Aug), Trade Balance (Jul), Unemployment Claims (Aug 29) and ISM Non-Manufacturing PMI (Aug); Canadian Trade Balance (Jul); UK Services PMI (Aug)
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Gold extended losses on Thursday from the previous trading session amid a stronger Dollar and as investors awaited a crucial US labour market report ahead of long-anticipated Fed policy meeting later in the month, which may see a historic decision. US private payrolls data suggested that labour market momentum likely remained strong even though US private sector added fewer jobs than expected in August. American companies employed 190,000 workers in the reported month, missing economists' expectations for 200,000 new jobs.
Economists predict that the government's more comprehensive employment report due on Friday is likely to show that non-farm payrolls rose by 220,000 jobs in August following the 215,000 gain in July. The unemployment rate is predicted to tick down to 5.2% from the 5.3% in July.
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Upcoming fundamentals: US trade deficit to narrow down slightly in July
US trade gap for July is currently projected to decrease from $43.8 billion to $43.2 billion on a monthly basis, meaning that the Dollar weakness is still weighing on exports from the country and is making imports cheaper. This data will be released along with weekly jobless claims for the previous week at 12:30 PM, as the latter are forecasted to increase marginally from 271,000 to 273,000.
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XAU/USD tumbled for the first time in five days
The precious metal failed to sustain rally on Wednesday, as the price declined for the first time in five working days. Despite that, gold is still trading above a strong demand zone at 1,131-26 represented by the monthly pivot point, 2014 low, 20-day SMA and 55-day SMA. While bears are still estimated to take control of the market in the mid-term, they are risking of losing momentum while remaining above the mentioned cluster of supports. Therefore, gains are still possible in the near term as bulls are aiming at recent high of 1,147.Daily chart
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In the one-hour chart the precious metal returned back below the 200-hour moving average, after spending just 18 hours above this line. However, it is too early to claim that a plunge is now inevitable. We are looking at the 2014 low (1,131), as successful testing of this mark is suggested to trigger additional sell-off of the yellow metal.
Hourly chart
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SWFX sentiment remains marginally bullish
In the meantime, OANDA share of bulls is staying at 61.45% of all current positions at the moment, while SAXO Bank traders are keeping as many as 60% (-4%) of long open trades.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast for the end of this year is 1,130
Meanwhile, traders, who were asked regarding their longer-term views on gold between Aug 3 and Sep 3 expect, on average, to see the metal around 1,130 by the end of December. Though, 56% of participants believe the price will be below 1,150 in ninety days. Alongside, 32% of those surveyed reckon the price will trade in the range between 1,150 and 1,300 by the end of this year. © Dukascopy Bank SA